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Planting the seeds of prosperity in Africa
THOMPSON AYODELE and ROGER BATE
explain how nations across Africa can
enjoy prosperity
LAST month, the International Monetary
Fund and the African Export-Import
Bank made $800-million in credit available to
Zimbabwe.
This initiative is meant to help the country restore its
ravaged economy.
But for Zim and other nations that lack the basic
institutions required to build
wealth, simply loaning or giving them money is not an
effective strategy for
reducing poverty. What's needed instead are programmes
that foster the conditions
that cause long-term prosperity and well-being.
A report just released by the Legatum Institute, an
independent
development think tank, helps identify some of those
conditions.
The 2009 Legatum Prosperity Index was developed by a
group of 13
distinguished economists and policy experts. The study
ranks 104 nations by their
level of prosperity.
Of the 15 countries that ranked lowest on the Index,
nine are in Africa - even
though many African countries, from the small Guinea
Bissau to the relatively large
Ethiopia, were excluded from the rankings due to a
dearth of data. Overall, 55%
of Africa's population, and 90% of the world's
population, is covered by the Index.
Africa's dismal performance can't be attributed to a
lack of aid. The
region received a total of $716-billion in international
assistance
between 1960 and 2006, after adjusting for inflation.
Yet many countries in the
region have failed to achieve sustained economic growth.
In 1981,
53.7% of Africans were living below the poverty line.
Today, that number is
virtually unchanged - it's still above 50%.
While Africa's poverty has not diminished, other
countries have become richer,
creating an ever-widening degree of global economic
inequality. In 1960, the
average person living in Asia, for instance, was poorer
than the average African. By
2003, the average Asian was almost 2.5 times richer
than the average African.
For policymakers, then, the big question is as follows:
If 50 years' worth of aid
hasn't had much effect, what will?
The Index points the way to an answer. It identifies
nine ‘building
blocks’ of prosperity - economic fundamentals,
entrepreneurship and
innovation, education, democratic institutions,
governance, health,
personal freedom, security, and social capital.
Nations lacking in these areas are at a serious
disadvantage when it comes to
achieving both wealth and happiness. Viewing Africa
through this lens, the nature
of the region's problems becomes clearer.
Look at Kenya, which ranked 95th on the Index. Almost a
quarter of Kenyans live on
less than $1 per day. The country's plight is
exacerbated by a disastrously
high incidence of HIV/Aids, with close to 5% of the
population infected.
Traditional aid hasn't helped Kenya because it doesn't
address the
country's systemic problems. Kenya is plagued by high
rates of assault, homicide and
theft, due to frequent civil conflicts often caused by
its repressive and corrupt
government.
Or take Nigeria, which came in at 98th overall. The
technology
infrastructure in that country is very poor, with less
than one personal computer per
100 people. Only 63% of Nigerian workers have attended
primary school, and less than a third of the
country's students have a
secondary education. Nigerian elections are poorly
regulated, and there's no
independent judiciary. The result has been severe
political instability that's
crippled this nation of over 140-million.
Contrast the state of these two countries with South
Africa which, at 51st, is the
highest ranking African country on the Index, and would
be higher were it not for its
high crime and security concerns.
South Africans
have relatively robust civil liberties, including the
right to freely associate with
political and civic organisations; 70% of the
country's citizens report being satisfied with
freedom of choice in their
daily lives.
SA has exceptional entrepreneurial activity, with over
41,350 new
businesses registered in 2007. And the SA school system
has one teacher per 30
students - a good ratio relative not just to Africa, but
to the world.
Another African success story is Botswana, which ranked
56th on the Index.
Botswana has experienced consistent economic growth over
the last few years. In fact,
since it gained its independence from Great Britain in
1966, the country's economy has grown faster than
China's by some measures.
Botswana would have ranked even higher if it were not
suffering from one of the
world's worst Aids epidemics.
The country's progress is partially attributable to the
fact that it's
relatively democratic - 84% of Botswanans report that
they're confident in the
fairness of the judicial system, and 91% believe that
the country's political
elections are honest.
The Prosperity Index makes clear what many already know
about prosperity: in order for
any society to flourish over time, people need to feel
safe, and have the freedom to
express themselves, start businesses, practise
their religion, keep healthy, and develop
meaningful social connections.
Growth is absolutely vital for Africa. The last 50 years
of development policy have
shown that money alone, especially money donated, can't
bring the region out of
poverty. What's needed is a holistic approach that
focuses on the building blocks that empower
Africans to help themselves.
* Roger Bate is the Legatum Fellow at the American
Enterprise Institute in
Washington, DC. Thompson Ayodele is the Executive
Director of Initiative for
Public Policy Analysis, a public-policy think tank based
in Lagos, Nigeria.
The 2009 Legatum Prosperity Index, available at
www.prosperity.com, was
released on October 28.
Thompson Ayodele
Director
Initiative for Public Policy Analysis
P.O.Box 6434
Shomolu,Lagos
Nigeria
Email:thompson@ippanigeria.org
Backup: thompson.ayodele@gmail.com
Website: www.ippanigeria.org
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